May 13, 2009

There has not been any significant change to the integrated circuit (IC) market since our last Market Insights report. Once again, we are tracking some sporadic shortages in some product lines, but nothing that is sustained over a long period. Most of these shortages are due to small upticks in demand. With many semiconductor manufacturers cutting back on production, and less product on the shelf at franchise distributors, it is more difficult for OEMs and CEMs to quickly pick up supply to solve these spot shortages.

However, there are still plenty of cost-savings opportunities in the spot market, given some of the excess material that exists in the market. With some customers slowing down or cutting production, there are some great potential cost savings available to customers. In addition, companies with date code flexibility can certainly take full advantage of this market and the opportunities it presents.

Converge does not expect any significant changes in market conditions over the next couple of months, although some predict the market will experience an overall uptick at the end of this year. That would certainly have a significant effect, given all the shutdowns and cutbacks by semiconductor manufacturers over the last year. Some of that optimism could be tied to what some see as the beginning of the turnaround of the global economy. For now, the market waits.

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Why Converge?

Converge, a subsidiary of Arrow Electronics, has evolved from an industry-leading electronics components distributor to a full service global supply chain partner. We help create full component life-cycle and process management plans for companies withchallenging sourcing, obsolescence, inventory and supply chain needs.

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Why Converge?

Converge, a subsidiary of Arrow Electronics, has evolved from an industry-leading electronics components distributor to a full service global supply chain partner. We help create full component life-cycle and process management plans for companies withchallenging sourcing, obsolescence, inventory and supply chain needs. Converge is headquartered in Peabody, Massachusetts, and has offices in Foothill Ranch, California; Amsterdam; and Singapore, along with support centers throughout Europe, Asia and the Americas. For more information about Converge,visit our website or call 978-538-8000.